Kenneth Cox, a senior vice president of MCI Communications Corp. and a former Federal Communications Commission member, insisted today that a controversial 1971 FCC decision authorized MCI to provide a wide range of specialized telephone services.
Cox delivered his testimony as MCI's four-month-old, $2.7 billion antitrust suit against American Telephone & Telegraph Co. came near to its close. Cox is the next to last witness during an MCI rebuttal.
The 1971 decision is pivotal in the case because MCI claims that AT&T violated the order's intent and federal antitrust law in denying MCI interconnections it needed to provide business telephone services. AT&T has claimed the decision limited the types of service MCI could provide.
"I think the specialized-carriers decision did not restrict our authorization," Cox said.
"It very clearly contemplated a full range of private-line services, which includes FX and CCSA, so that . . . to the extent that is relevant, the commission clearly contemplated . . . that we would provide the full range of private-line services," Cox said.
AT&T provided those interconnections only after forced to by a series of court decisions.
FX, or foreign exchange, a hook-up often used by airlines, allows a caller to dial a local number and reach an out-of-town receiver. CCSA, or common control switching arrangement, is a private system linking a firm's offices in different cities.
George Saunders, the AT&T lead attorney in the case, tried repeatedly to demonstrate that MCI misled the FCC about the types of services it intended to offer business customers.
Saunders showed the jury in the case and U.S. District Court Judge John Grady a June 1972 MCI stock prospectus which didn't mention specifically the specialized services.Those services ultimately were a major part of Mci's business and an important thrust of the FCC's decision to open the telecommunications industry to competition.
But Cox said AT&T knew that MCI ultimately would offer these services and said that at the time the prospectus was written, MCI wasn't certain which services it would market. "As circumstances change, our business reaction to that has changed," Cox said. Cox was a member of the FCC for more than seven years, leaving the commission one day before joining MCI on Sept. 1970.
Saunders pointed out that when MCI was granted permission to serve the Chicago-to-St. Louis telephone market in 1969 -- a landmark decision for the Washington-based firm -- Cox was part of the commission majority that approved the application 4 to 3.
The three MCI rebuttal witnesses -- Cox, Bernard Strassburg and William melody -- are all former FCC officials.
Melody took the stand late today as MCI was about to close its rebuttal.
The final AT&T witnesses will be followed by two days of closing arguments before the case is given to the jury for a decision.